The Rolled-Back Pickup: A File With Holes In It
A consignor delivers a 2016 pickup to your auction barn and writes '68,000 miles, actual' on the consignment sheet. At intake your clerk notices the odometer reads 68,412 but that pedal wear, seat bolsters, and a service sticker suggest far higher mileage; nobody checks further. The truck sells for a $19,200 hammer price, plus a 10% buyer's premium and 8% seller commission. Three weeks later the buyer discovers a title-branding and odometer-disclosure problem and demands his money back. Your file contains a signed consignment sheet, a lot number, and the hammer price - but no bidder registration card, no record of the high bidder's identity, and no written buyer's-premium disclosure.
1. The buyer wants his money back. Who bears the loss - the consignor, the auctioneer, or the buyer - and does the as-is language in your terms protect you?
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Start with who made which representation; the answer is not the buyer.
- The consignor wrote '68,000 miles, actual.' That is the consignor's warranty, and a false odometer statement exposes the consignor to federal and state odometer liability. The consignor is the primary source of the loss.
- But you are not a conduit. Once your clerk saw pedal wear and seat bolsters inconsistent with 68,412 miles, you had a red flag. Publishing the consignor's mileage statement in your catalog and repeating it from the block makes it your representation as well.
- As-is language disclaims quality; it does not immunize a known or recklessly made misrepresentation. Neither does a properly disclosed buyer's premium.
- Practical path: do not litigate the buyer into submission over a $19,200 truck. Pull the title and odometer history, then either rescind - refund hammer price plus premium, take the truck back, return it to the consignor - or negotiate a written price adjustment signed by both parties. Do not keep the 8% commission on a sale you unwind: the seller did not get a completed sale and the buyer got nothing.
2. Set the substantive problem aside. What does the missing documentation cost you, and what should a complete auction file contain?
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The file gap is a separate violation, and it is the one you cannot argue your way out of.
Without a bidder registration card you cannot prove who bought the truck, cannot prove the premium was disclosed before bidding, and cannot show the Board a complete transaction. In a dispute you would be relying on the buyer's own records to establish your own sale.
A defensible file shows, for each lot:
- the written consignment agreement with commission rate, reserve, and settlement terms;
- the buyer's registration with verifiable identity and contact information;
- lot number, high bid, hammer price, buyer's premium, and buyer identity;
- date of sale, auctioneer's name and license number;
- the settlement statement to the consignor showing gross, commission, fees, and net;
- the printed terms as actually announced, including the premium disclosure.
Action now: reconstruct what you can from clerk sheets and payment records into a dated memo, signed by whoever prepared it. Going forward, no lot closes without a completed bidder record, and the printed terms must be preserved with the sale file. Retain these records for the period the Board requires and produce them on inspection.
3. The consignor says the auctioneer should have caught the mileage issue and refuses to return the proceeds. What is your position and what do you do with the commission?
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You have leverage with the consignor because the consignor signed the false statement, but you share exposure because you repeated it after a red flag.
- Position: the consignor warranted the mileage in writing. If the truck is returned, the consignor owes the net proceeds back; the consignor's refusal does not transfer the consignor's warranty to you.
- Your own conduct: you had notice from physical indicators and sold anyway without inquiry. Expect the Board and a court to treat that as at least negligent, possibly reckless. Do not defend on the theory that the consignor lied, so you are clean.
- Commission: do not hold the 8% on an unwound sale. Refund it as part of the rescission, and if the consignor will not cooperate, cover the buyer's refund first and pursue the consignor for the net - the buyer should not wait on your internal dispute.
- Escalation: send the consignor written notice of the claim with a deadline; if unresolved, the matter is a civil dispute, and you should consult counsel before any setoff against other consignments (setoff against unrelated consignments invites its own claim).
- Prevention: add an intake checklist that flags odometer/physical discrepancies, and stop the lot until the consignor documents the actual mileage in writing.